HRT plays cards close to their chest


Less than a year after the hype that saw the arrival of Brazilian oil giant, HRT, in Namibia, its Africa Operations President, Nelson Narciso Filho has already left under a cloud of secrecy and the company has floated some of its operations to the Russians.

HRT announced that they will be selling off some of their shares in Africa - Angola and Namibia – specifically. This has raised concern on whether the company’s plan to drill five oil wells in their Namibian offshore projects is still on track.

Founding President Dr Sam Nujoma was part of the guests that welcomed HRT in Namibia at a Samba-filled ceremony at Country Club last June.

In the past year, share prices of the company have sunk 66%, reflecting rising exploration and production risks and uncertainty in strategy regarding the Namibia blocks.

When approached for comment on whether the well drilling was still on track, Martin Davis who replaced Filho was blunt; “I am not ready to speak to the media. I do not want to talk to you.”

Davis was elevated into the hot seat after serving the company as the chief financial officer from the London School of Economics and Political Sciences.

It was his refusal to comment on the company’s selling of shares across the world and the abrupt departure of his predecessor that prompted The Villager’s inquiry into the veiled secrecy.

Filho left the company and Namibia last month, in a huff and to date, HRT has not given insights into the reasons behind the departure of the former company’s boss.

HRT has refused to answer whether their multibillion-dollar venture will yield the anticipated oil in Namibia and they might not be in a position to answer until a feasibility study is carried out.

HRT completed a seismic campaign where they acquired 5728 square metres for the 3D seismic study, which is vital for their pre-feasibility study.

However, there is no feasibility study to date, which will confirm either none or the availability of oil in Namibia.

HRT poured N$3.5b into the Namibian economy to finance initial drilling operations during their pre-feasibility study.

It has also been viewing their operations in Namibia as a risk, until the company proves the availability of oil that can be exploited from the shore according to an interview Filho had with The Villager before his departure.

While the operations of HRT in Namibia have not comprehended their claim on the availability of oil resources in the country in their 12 blocks covering a total area of 68 800 square kilometers, the company operates two blocks in the Walvis sub-basin and eight blocks in the Orange sub-basin and retains close to 2.85% as non-operator in the Luderitz basin where they have influence in two blocks, although they are still to drill their first well.

According to the Brazilian media, Russian gas giant; Gazprom opened an office in Rio de Janeiro last week, while another Russian oil producer; TNK-BP announced an agreement to buy 45%  of the Solimoes Basin project for US$1b from the Brazilian HRT Participacoes em Petroleo to intensify the company’s operations in the Americas (North and South).

TNK-BP and HRT Participacoes em Petroleo will jointly produce oil and gas from fields near the Amazon, with first output expected next year.

And amid this cloud on its Namibian operations, HRT’s last released financial results also indicate a US$53.2m over expenditure caused by increased exploration activities worldwide.

With such a shaky financial background, it still remains questionable whether HRT will be able to fulfil its plan to invest about US$950m in Namibia by the end of this year to cash in on offshore oil reserves, as planned.

HRT could earn as much as US$1b from their intended sale, according to Santander Investment Securities analyst, Christian Audi.

Three months ago, Filho revealed to The Villager that their operations in the country had not found concrete traces of the availability of oil in Namibia and the intended drilling could take longer to be accomplished.

Filho, once touted to take over as Brazil’s oil ministry last year, told The Villager that their Namibian operations were handicapped by a serious shortage of technical capacity from the local people, hence the company had to plan a massive bursary scheme to train about 500 locals in Brazil on oil drilling.